America doesn’t have a “healthcare system”

Health Care Business

The healthcare industry, like every other industry in the “free” world, is a network of private individuals and entities engaged in consensual interaction on the basis of aligned interest and profit motive.

Each of the countless people and entities involved have a personal stake in the successful fulfillment of their role – their livelihood depends on it. Those who fail are quickly replaced. (No act of Congress needed.)

Our healthcare industry is not a “Healthcare System.” Unlike a school district, a highway department, postal service and other government-controlled systems, an industry or economic sector cannot and should not be thought of in terms that imply central control.

Why? Central control omits or diminishes the individual motive for consensual participation; taking merit, profit out of the mix as drivers of innovation, competition and excellence.

When someone fails in the private sector, competition sees to it that the failed entity is swiftly replaced. When a government-monopoly fails, it takes years and several acts of Congress to attempt a repair. Rather than concurrent solution-options offered simultaneously by a variety of competing concerns, you have sequential solution attempts, each hindered by the inevitable constituency every force-of-law program attracts.

No industry can be treated as a singular, centrally planned system, without gross disruption to the incentives which assure constant regeneration, renewal and innovation.

Americans used to understand this instinctively. That’s why our Constitution confines the Federal Gov’ts jurisdiction to specific, enumerated areas – none of which authorize it to control industry.

A full ObamaCare repeal had been passed by the House under Obama.

Now that Trump is in office why can we not put that very piece of legislation back through the works and have Trump sign it?

Then (and only then) we can look at removing any obstacles to allowing the private network to regenerate insurers, incent providers and restore consumer price pressure to its role in containing price escalation. Healthcare “prices” have not been subject to regular price pressure in at least a generation.

3rd-party payment so insulates us from cost that we no longer have any informed sense of value in medical care. The price of a given service has become, “whatever your insurer will allow.” Yet we act like insurance is the whole problem, focusing over a decade of legislative “solutions” on what had been a contract between private parties for the management of financial risk.

Why did this happen? It happened because the monthly insurance-premium amount has greater visibility than does any other healthcare cost. And if that’s where our attention is focused, that is where the potential “political capital” lies. So we have an entire body of law now focused on redefining health insurance.

Let’s look at the strange way we’ve come to define “health insurance.”

We’ve come to demand a “pre-paid health plan” that “covers” every conceivable service whether elective or not and whether or not the condition precipitating the need for that service pre-existed the “insurance” contract. The (natural?) result of this unreasonable demand is a ghastly-high premium on a policy that calls everything “covered” but actually pays for precious little until we exceed $4K-6K in costs – an eventuality unlikely outside of a hospitalization.

In effect, the result is that we all have “major-medical-only” coverage now (assuming “‘covered” means, “paid-for”).

If we insured our homes the way we insure our bodily care, we’d need to file a claim to change a light bulb. We’d then self-fund the purchase of the lightbulb (at many times today’s going price) but then smugly remind ourselves that this cost “went against my deductible.”

The biggest factor driving up the cost of healthcare services is the complete absence of consumer price-pressure on providers of healthcare! If individuals are covering their routine-care costs via HSA Accounts, the services rendered will once again come under the constant scrutiny of millions of Americans. That alone will force transparent and competitive pricing.

Let’s get back to common sense. The combination of HSA for funding routine care and an actual insurance policy for managing catastrophic-expense risk will put consumers back in charge.

Absent the unreasonable force-of-law demand that insurance companies transform into administrators of prepaid healthcare plans, insurers will resume constructing and offering competitive insurance products.

We have no need for a Federal Healthcare law as long as we remain a free society capable of innovating many and varied alternatives – simultaneously – without an act of Congress.

5 Comments
  1. “Now that Trump is in office why can we not put that very piece of legislation back through the works and have Trump sign it?”

    The obvious answer to your questions would have been that under Obama, the GOP was assured that the repeal would never get signed. Under Trump, the only way it would get signed is if he gets his single-payer model. The GOP wants to maintain the status quo because they have no idea how out of touch, from reality and their constituency, they are.

  2. Bingo, Mr. Olson! It seems however that Trump’s most ardent supporters are as “religious” in their faith as were Obama’s. When challenging the “faithful” it’s usually best to do so with a question.

  3. Free Market health care is the solution where individuals not employers own the insurance policies. People will naturally choose high deductible, low premium policies. It should not be subsidized as this will drive up prices. HSAs are a step in the right direction but ending the income tax would be better. This would make tax deductible HSAs meaningless.
    Check out The Free Market Medical Association https://fmma.org/ Their prices are listed and half the usual & customary.
    As prices drop, taking care of the poor and indigent will become easier to afford.

  4. Thank you Mr. Loftman for linking this fascinating organization in your astute comments! I just visited their website to learn more and have written to them to find out if they yet have practitioner-members in my area. Private medical cooperatives seem the most rational response to the insane push to turn the whole of an economic sector – responsive to the population – into a government-centric-system – responsive to bureaucrats in Washington.

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